Kentucky Club for Growth
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September 29, 2010

Lexington's Busy Spending Money to Sue Itself

Herald-Leader reporter John Cheves writes that Lexington has already spent $51,000 suing itself over the fraud-allegation investigation.

Lexington taxpayers face at least $51,000 in legal bills from a battle between the city's Internal Audit Board and an Urban County Council investigative committee.

And the meter is still running. A lawsuit to decide whether the council can serve a subpoena on the audit board is pending in Fayette Circuit Court. The cash-strapped Urban County Government is paying for lawyers for all parties in the dispute and could continue to do so for months or even years.

"My concern is that both sides can continue this fight, and then the losing side can appeal all the way to the Kentucky Supreme Court, and we're stuck with the bill. It's not clear to me who gets to decide how far this goes," Councilman Chuck Ellinger said Tuesday, after the council was told at a work session about the growing legal bills.

Taxpayers should be concerned too.

September 28, 2010

Beshear Agrees with House Republican Platform

Last week, the House Republican Caucus announced a platform agenda for the 2011 session. It has apparently gained momentum as Governor Beshear has voiced support for its first proposal. According to a press release, Jeff Hoover thanked the Governor for his support:

"We are appreciative that Governor Beshear during an interview on WHAS-AM this morning expressed his support for BR 153, which if passed would require legislators to forfeit their pay during a special session if they are unable to pass a budget during the regular session of the General Assembly.

We are grateful he supports the lead that the House Republican Caucus is taking in bringing the trust back to state government, and we look forward to working with him in helping us pass meaningful legislation during the 2011 session."

September 27, 2010

Tone-Deaf Kingdom

Now is just not the right time to ask Kentucky taxpayers for a $50 million bond.

The developer taking over Kentucky Kingdom plans to ask the Kentucky State Fair Board for a $50 million bond issue to upgrade and reopen the amusement park.

Ed Hart, who was designated in May by the fair board as the park's preferred operator, told The Courier-Journal that the proposal calls for park revenue to pay off the bonds over the next 20-plus years, covering an annual debt of about $3 million.

September 21, 2010

Republicans Release Solid, Unexciting Agenda

Today, the Kentucky House Republican Caucus released a six-point agenda for the upcoming session they are calling "A New Day, A New Direction for Kentucky".

The proposals are good protections of the taxpayer that are so safe and common-sense that you are left wondering why they aren't state policy already.

  • Refuse special session pay if they fail to pass a budget
  • Require a 48-hour waiting period to read bills before voting on tax and spending legislation
  • Close pension loopholes for all state elected officials
  • Require competitive bidding on all construction contracts
  • Require all state expenditures to be posted online

Again, all good proposals, but an underwhelming agenda.

A sixth item:

  • Expanding managed care opportunities in Medicaid

is indeterminate. Taking managed care statewide and allowing competition among managed care services might yield savings, but their proposal to simply expand the state's "Passport" program is not likely to significantly change costs and will require a dubious renegotiation of the federal waiver.

All in all, the first five will protect taxpayers from being cheated. It's a shame that these obvious policies constitute an agenda. But in Kentucky, they probably do.

Kentucky House Republicans to Unveil Agenda

Today at 10 AM in the State Capitol, the House Republican Caucus will reveal their agenda for the 2011 session.

We're off to see it & report back to you...

September 13, 2010

Conservatives v. Pragmatists

In Delaware tomorrow, the GOP Senate primary is set up as a conservative v. moderate match, where the conventional wisdom (and the polls) suggest the conservative, Christine O'Donnell, has no chance in November while the moderate, Mike Castle, would have the race locked up.

The Club for Growth provided a good commentary on the politics of what it means to fight for your conservative beliefs when those beliefs potentially conflict with political victory, and I've reposted it here.

On Delaware and New Hampshire

Posted on Sep. 13, 10 | 01:08 PM by Michael Connolly | Topic: Elections

The conservative blogosphere is atwitter today about the late surges of Senate candidates Christine O'Donnell in Delaware and Ovide Lamontagne. The controversy is a familiar one.

On the one hand, movement conservatives would be wonderful in those seats. But on the other, if those movement conservatives can't win in November, that has to be part of the calculus, too. It's neither disloyal or dumb to be conflicted in these cases.

(The Club for Growth PAC has taken no position on either race, and I take no personal position here, either.)

But one point commentators are missing, I think, is the reason conservative primary voters may be willing to risk defeat in November for principle in the primaries. It is because of the leadership of the Republican Party in Washington.

If conservatives trusted that a Mike Castle, say, would be kept in line by the official GOP in Washington, they would be more willing to hold their noses and vote for him. But for conservatives, "pragmatism" is often the victory of hope over experience.

Is it really the case that Mitch McConnell and the Senate Republican leadership will pull Castle to the right, or that Castle will pull them to the left? Whatever side you're on, I think the experience of Olympia Snowe and Susan Collins - even on the fiscal issues on which they are supposed "conservative" - makes the answer unclear.

If Castle is a sure vote to repeal Obamacare, for instance, that would matter - as it did for Tea Party conservatives who rightly supported moderate Scott Brown in Massachusetts.

But will Castle really be the 60th vote to repeal Obamacare, when the time comes? Or would he instead form a bipartisan "Gang" with Snowe, Collins, Joe Lieberman, and a handful of Democrats to "modify" Obamacare, and to rescue it from full repeal?

I don't know. Neither do the bloggers. And neither do the perfectly sensible Republican primary voters in New Hampshire and Delaware. Castle/Ayotte voters are not sell outs, and O'Donnell/Lamontagne voters are not foolish. They're both trying to figure out how best to save the country from an out-of-control Democratic government and an out-of-its-depth Republican establishment.

In Case You Wondered What Churchill Downs Thought Of Horse Racing...

From the 'Actions Speak Louder Than Words" Dept.:

Churchill Downs was involved in a transaction today that demonstrated clearly that they do not feel the company's future growth has anything to do with the horse industry.

Churchill Downs Inc. announced Monday that it is buying a Mississippi casino resort hotel along the Mississippi River for $138 million.

Closing is expected within six months.

It would be the Louisville-based racetrack and gambling company's first property not affiliated with a racetrack and represents a continuation of its diversification strategy, CEO Bob Evans said in a statement.

If even the Kentucky Derby company is diversifying away from the horse industry, what's that tell you about the future of horse racing as an entertainment venture?

Lexington's Golf Policy Hurts The Bluegrass

Today, our editorial was published in the Lexington Herald Leader. Here is the unedited version:

Public Golf in Peril

A recent Herald-Leader editorial opined that public golf in Lexington is in peril. Unfortunately for readers, the writer had no real understanding of the current circumstances of Lexington's golf operations.

The peril Lexington-owned golf faces is not the transparency and accountability demanded by public-interest groups like the Kentucky Club for Growth, but a crisis of leadership from Lexington's elected officials.

The city owns six golf courses throughout Fayette County. This year, the budget expects citizens of Lexington to pay approximately $2.3 million in personnel costs, $500,000 in costs of goods, $1.3 million in operational costs and (a generously low estimate of) $200,000 in debt service to maintain the six courses. This sum of over $4.3 million dollars does not fully reflect the cost, not accounting for things like lost property taxes and services such as insurance, legal counsel, marketing, or auditing.

In terms of revenue, golfers in Lexington paid about $3.4 million dollars to play on Lexington's courses in 2009, a sum the city will have been lucky to reach in 2010. Netted against the $4.3 million in expenses, the result is an annual deficit of nearly $1 million. This deficit is more than the city's budget for special programs, which includes holiday events, festivals and arts funding.

Very few cities would tolerate such losses. A management audit of the city's operations in 2007 by Mayor Newberry showed that most cities that operate golf courses create positive revenues that are used to pay for other parks services.

To look at it another way, mayoral candidate Jim Gray's "Fresh Start for Lexington" proposal suggests comparing Lexington to benchmark cities like Madison, Wisconsin and Ann Arbor, Michigan. Ann Arbor is privatizing one of its two golf courses in an effort to stem annual losses. Madison operates its four golf courses as an 'enterprise' with an annual budget of $0, aiming for self-sufficient operation (although they've never quite succeeded, bailing out the fund in annual $150,000 installments).

By any comparison, Lexington is hemorrhaging tax dollars to pay for its golf ownership.

The cause of Lexington's loss is fundamental: the supply exceeds the demand. This was apparent in 2008 when Aaron McDowell, the head pro at Lexington's Tate's Creek Course told the Herald-Leader that "I just think there's a lot of golf courses in the area and not enough people to play on them."

As Mr. McDowell pointed out, daily-fee golf is no longer a scarce activity. In addition to the six courses Lexington owns, there are over 20 additional publically-accessible courses in Fayette and surrounding counties. From the affordable High Point course in Nicholasville to the acclaimed Old Silo in Mt Sterling, a variety of privately-operated greens are within a short drive.

The city's $1 million deficit also makes it difficult to afford the investments necessary to offer a high-quality, competitive product. Instead of closing lesser-used facilities and using funds to invest and upgrade others, Lexington has the same courses with the same layout, regardless of the experience today's golfer is looking for.

When Lexington does want to invest in golf, the deficit means that improvements must be paid for entirely by taxpayers, not golfers. This year, taxpayers will foot a new $440,000 bond to purchase new golf carts.

While Lexington's golf courses are routinely bailed out of million dollar losses, the entrepreneurs and employers who operate golf businesses do not have that luxury. They must compete for customers with an operation that can lose money regularly but still survive. Instead of constantly improving, they are forced to cut corners and forgo improvements in order to compete with Lexington's artificially low prices.

Lexington's losses degrade the golf experience in the entire region.

Instead of maintaining the status quo of losing money, Lexington deserves an alternative.

The Council should support changes that allow Lexington golf to be a positive contributor to the golf experience in the Bluegrass. Whether that means realigning some courses, securing a private operator or simply operating as a self-sufficient enterprise, the goal should be eliminating losses to the taxpayer and creating a product that attracts golfers to Lexington.

Lexington and nearby courses should partner to promote Bluegrass golf as a destination experience. Just as the Bourbon Trail links together a signature product as a destination, regional daily-fee operations should work together to create a Bluegrass Golf Trail.

Councilman Jay McChord should be commended for his efforts to understand why Lexington's golf continues to suffer such a financial loss. He is beginning to ask questions about what a better future for golf might look like. Just a little leadership could start the transition from decline to stability, and create a better situation for golfers and taxpayers alike.

September 2, 2010

In Money-Wasting News, Unions Attempt to Force Illegal PLA on Elementary School Construction

Union members in Carter County are attempting to force Project Labor Agreements on the construction of a new elementary school, against state laws.

Associated General Contractors of Kentucky, which represents about 700 companies, claims the district gave improper preference to union contractors when it signed a project labor agreement with the Tri-State Building and Construction Trades Council for the construction of Tygart Creek Elementary School.

The association filed a suit in Franklin Circuit Court Wednesday asking the court to stop the district from awarding bids under the agreement.

The agreement stifles competition by imposing union rules on contractors who work on the project, according to the suit.

"It excludes 92 percent of Kentucky open-shop contractors," said Richard Vincent, executive vice president of the association. "We will vigorously defend our membership for the right to compete on construction projects."

The agreement requires workers to be union members and requires contractors to hire workers from local union halls and follow union work rules, and that workers receive union wages and benefits and pay union dues and fees, according to the suit.

Not only is it discriminatory, it artificially raises the cost of the construction, wasting Kentucky taxpayer money.

We will keep you updated.

UPDATED: Franklin Circuit to Rule on Furlough

UPDATE: Judge will not block furlough, but will allow suit to continue.

A group of state workers had filed suit to block the six furlough days Governor Beshear had ordered in order to save the state $24 million and avoid layoffs. Today the judge will rule on the suit after admitting yesterday that the Governor was granted the authority to furlough in the law.

However, to grant an injunction blocking the furloughs, Shepherd said he would have to find that Beshear broke the law. The General Assembly this year gave Beshear permission to do what he did, Shepherd said.

"The budget bill gives the governor extremely broad authority to enact a furlough plan," Shepherd said.

The first of the six furlough days will be Friday.

September 1, 2010

KRS Wants To Be Audited

From the Courier-Journal:

The Kentucky Retirement Systems' audit committee voted Wednesday to recommend that the full board ask state Auditor Crit Luallen to examine the use of agents who advise the system's investment managers.

In addition, KRS Board of Trustees Chairman Randy Overstreet said he would ask Luallen to review the board's internal auditing process, as requested by Gov. Steve Beshear in a letter to Overstreet last week.

Whether or not Crit finds scandals, the system will still be underfunded to the tune of billions of dollars!

Williams - Farmer Announce

We are potentially in for the best gubernatorial debates in Kentucky history. Until then, play the count the basketball game:

Williams - Farmer 2011

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The KY Club for Growth seeks principled candidates who are committed to the following:

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